January 24, 2012

Gov't Minister in Equatorial Guinea Fights DOJ Forfeiture Case

A sitting member of the Equatorial Guinea cabinet whom prosecutors describe as a corrupt official is challenging the U.S. Justice Department’s effort to seize and forfeit tens of millions of dollars in property.

The official, Teodoro Nguema Obiang Mangue, represented by a team from Cleary Gottlieb Steen & Hamilton in Washington and lawyers from Houston's Foreman, DeGeurin & DeGeurin, late Monday filed an opposition to the forfeiture suit in Washington federal district court.

The attorneys, including Cleary partner Juan Morillo, said in the court papers that Nguema, the son of the country’s president, legally acquired the Gulfstream G-V aircraft that the federal prosecutors wants to seize. The lawyers have asked U.S. District Judge Amy Berman Jackson to dismiss the case.

Prosecutors in October filed forfeiture complaints in Washington and in California federal district courts, accusing Nguema of abusing his position as a government minister to amass a personal fortune of more than $100 million. Nguema is the current minister of agriculture and forestry of Equatorial Guinea.

The $38.5 million airplane is the target asset in the Washington case. In California, prosecutors are going after a $30 million house and Michael Jackson memorabilia, among other items.

Morillo said in the court papers filed yesterday in U.S. District Court for the District of Columbia that DOJ forfeiture case is “unprecedented and unfounded.”

“The government has never previously brought a forfeiture case based on alleged violations of foreign law against the assets of a sitting foreign government official in good standing in his country, who has not been charged or convicted of a criminal offense in his country,” Morillo said.

Nguema’s lawyers said Equatorial Guinea will not enforce any judgment to seize the aircraft. They also said a judgment against Nguema “will infringe Equatorial Guinea’s sovereign right to create, interpret, and enforce its own laws and will significantly hinder the existing cooperative, friendly relationship between the United States and Equatorial Guinea.”

Prosecutors have known for at least a decade the source of Nguema’s income, which the official’s lawyers said is derived from his construction companies and from timber sales.

“Minister Nguema, like most other Equatoguinean government officials including the President, legally owns private businesses that generate income as well as employment and economic development,” Morillo said in the court filing.

Morillo said Nguema legally purchased the Gulfstream jet from Blue Sapphire Services, a British Virgin Island corporation, less than a year after prosecutors said they did not have reason to believe that the purchase of the aircraft would violate U.S. money laundering laws.

John Roth, an assistant U.S. attorney, said in an April 2005 to Sidley Austin’s Thomas Green that “[W]e have no basis for either restraining or seizing proceeds” used to finance the proposed sale of the jet.

Nguema’s attorneys also challenge the criminal allegations in the DOJ forfeiture complaint, saying that prosecutors have failed to support the contention that Nguema obtained property through theft or extortion.

“The government simply alleges that because Equatoguinean government officials are wealthy, they must be engaged in unlawful conduct,” Nguema’s lawyers said.

Justice Department prosecutors will have a chance to respond in court to Nguema’s assertions. A DOJ spokeswoman was not immediately reached for comment this afternoon.

"While his people struggled, he lived the high life--purchasing a Gulfstream jet, a Malibu mansion and nearly $2 million in Michael Jackson memorabilia," Assistant Attorney General Lanny Breuer of the Criminal Division said in a prepared statement in October. "Alleging that these extravagant items are the proceeds of foreign official corruption, the Department of Justice is seeking to seize them through coordinated forfeiture actions."